Clash of titans at JFK

American Airlines is spending a lot of money to establish its dominance at John F. Kennedy International Airport. In a few weeks, the Dallas-based carrier will unveil a completed $1.4 billion terminal. It is also moving aggressively to expand domestic service and upgrade business class--measures designed to raise its profile in New York.

But the entrenched giant is facing increasing competition from a resurrected competitor: Delta Air Lines. For the past two years, even while in bankruptcy reorganization, Delta has been focusing its efforts on New York. It has been quietly adding international flights and establishing connections from smaller U.S. cities.

At a time when overseas routes have become the sweet spot for airlines, the battle is on between American and Delta--the largest international carriers at the nation's busiest international airport. JFK has seen total traffic increase 5% to nearly 50 million passengers for the 12-month period that ended in May.

"There's no question that Delta is driving a lot of the flight growth out there [at JFK]," says a spokesman for the Port Authority of New York and New Jersey. Since emerging from bankruptcy in May, the Atlanta-based airline has added nine international flights to its New York schedule.

For sure, American's hefty investment at JFK and its strategy of flying bigger jets to bigger cities have had their rewards: The airline leads Delta by nearly 1.5 million passengers per year.

"We've probably spent more money than all those other carriers rolled together," says Chuck Imhof, managing director of American's greater New York operations.

For the past five years, JetBlue Airways has moved the most passengers through JFK, its home airport, but the discount carrier's focus is primarily domestic.

American is in the midst of what executives are calling a "win back" campaign, actively trying to recover lost customers. Last month, it announced service from JFK to London's Stansted Airport, which is closer to the city's Canary Wharf financial center than Heathrow is.

American's arrival at the small airport means it is trying to head off a passenger shift led by upstart business-class carriers Maxjet and Eos Airlines, which fly into Stansted.

Business-class extras

In addition, American is opening two new Admirals Clubs, its frequent-flier lounges, and has added larger planes on routes to cities such as Atlanta, Charlotte, Las Vegas and Minneapolis--all business-focused destinations. In March, it announced added service to Saint Lucia and Saint Kitts and Nevis.

"We're flying to places that the business traveler wants, and complementing that with leisure destinations that will be attractive to them," says Mr. Imhof.

Delta is not to be outdone, however. Last month, it revived talks with the Port Authority to rebuild its terminals at JFK, though Delta executives say it's too early to pinpoint a dollar amount.

"There's going to be a sizable investment," says Glen Hauenstein, executive vice president and chief of network at Delta.

American enjoys higher passenger traffic, but Delta offers more flights to more destinations from JFK--nearly 2,500 flights per week since September, compared with American's 1,300 per week.

Despite a splashy announcement in February by American about added service, the airline hasn't added many international routes since then. It flies daily to London, Paris, Rome, Zurich and Brussels, though company executives plan to announce next month new international destinations to be added next summer.

"American goes out of its way to dominate the big cities in the big markets, and it doesn't really bother with the rest," says industry consultant Craig Jenks, president of Airline/Aircraft Projects Inc.

Delta, on the other hand, has been adding nonstop flights to smaller international cities such as Accra, Ghana; Bucharest, Romania; Kiev, Ukraine; Pisa, Italy; and Tel Aviv, Israel. In turn, the airline has added domestic "feeder flights" from cities such as Buffalo, Syracuse and Rochester to fill seats on the international ones.

Different approaches

"It's a totally different philosophy," Mr. Jenks explains.

Delta has a more comprehensive nonstop network, he adds, while American is staking its fortunes on a smaller number of big cities and less reliance on connecting traffic.

"Which strategy will win out in the long run remains to be seen," says Mr. Jenks. "American seems to be winning at the moment."

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